How Will the Redrawing of Flood Maps Hit Home Insurance?

More properties could be labelled as at risk of flooding on the Environment Agency’s map if it is redrawn, warn experts.

The agency is re-examining its flood map after extreme flooding at the end of last year, with the potential for more homes to fall into areas considered at risk.

This could cause more homeowners to face higher insurance premiums, or maybe battles to sell their homes.

How Will the Redrawing of Flood Maps Hit Home Insurance?

Redrawing the map to encompass more properties could also put pressure on the Government-backed scheme Flood Re, which was created to help homeowners in high-risk areas access affordable insurance.

The map indicates the level of flood risk that properties in certain areas should expect. It is one of many factors that insurers take into account when pricing up cover.

When Flood Re launches in April, insurers will be able to pass on the flood risk element of a policy to the scheme and premiums will be capped based on each property’s Council Tax band.

However, the scheme does not cover homes built after 1st January 2009, commercial properties or homes that are let.

Insurers have faced huge payouts since the floods in December.

Direct Line expects to pay up to £140m to claimants – £35m more than their annual prediction for weather-related claims.

Jill Boulton, a flood map expert and director at Yorkshire-based JBA Risk Management, predicts that the Environment Agency will extend its maps following the widespread flooding over Christmas.

She says: “I’m anticipating that more properties will be included, because of global warming and the conditions that we’re seeing.

“It’s difficult to know what to prepare for. What happens when you get levels that are expected to happen every once in 100 or one in 200 years? What level of defence do you go for?

“I’m guessing that they’re going to review a lot of their data. What if what happened in Cumbria was to happen in the South East?”1

She adds that while flood mapping was based on historical data until now, in the future it is likely to include more provision for climate change and less predictable occurrences. This would therefore extend high-risk areas.

She believes that Flood Re will help some homeowners, but insurance might become unaffordable for those living in new build homes or commercial properties – including buy-to-let and blocks of flats.

Some homeowners have criticised the maps for putting their properties in high-risk areas and therefore pushing up their premiums, leaving them with high bills after flood damage.

A spokesperson for the Association of British Insurers (ABI) says the rules regarding new homes are intended to discourage developers from building in high-risk areas.

An Environment Agency spokesperson states: “Flood insurance cover is critically important in reducing the impact of flooding on people. We review our flood data constantly and re-examine it after flooding incidents.”1